The news has investors nervous that banks have hardly put the foreclosure mess behind them. Several large banks halted foreclosures in 2010 as a result of shoddy documentation and paperwork. Friday’s court ruling revives the headline risk for bank stocks.

XLF is off more than 1% today with about 150 million shares trading hands so far, compared with the 30-day average of 64 million shares. XLF is seeing higher trading volume than SPDR S&P 500 ETF (SPY), which is rare. SPY is almost always the ETF volume leader.

Big banks such as Wells Fargo and J.P. Morgan (JPM) are dragging on XLF today, although the ETF is still up more than 1% for the week. XLF is on track for its most active trading day in at least two months.

XLF could see trading pick up as large banks start to report quarterly results. JPM kicks off the action next Friday.